01.15.10

Tallying the NBC Damage

With a deal nearly done for Conan O’Brien to leave NBC, Kim Masters assesses the cost to the network—both in dollars and in the reputations of those who remain.

From the start, there was only one logical outcome: NBC was going to have to pay Conan O’Brien a lot of money to leave. Now the company is said to be coughing up about $30 million, putting an end to what may well be the greatest march of folly in television history.

NBC has had its own freaky and very expensive version of a Shakespearean drama. The king (of late night) was pushed prematurely off his throne, the order of the television universe was disturbed and a great deal of extravagant drama (and comedy) ensued. Now that the king is returning to his throne, the total cost, counting everything, could run more than a couple of hundred million dollars.

One studio executive says there can be no doubt of the damage done to Jay Leno’s reputation: “You can’t be the butt of so many jokes and not pay a price.”

That’s the estimate made by a former NBC Universal executive who is including everything from the cost of building Conan O’Brien’s new Tonight Show studio in Los Angeles to the cost of paying him off Adding the damage to primetime ratings, and to revenue from affiliates and NBC-owned local stations, . “It’s easily over $200 million,” he says.

Despite NBC Universal sports chief Dick Ebersol’s too little, too late counterattack on O’Brien in the New York Times, O’Brien waged an enormously successful public relations war. Meanwhile, Leno has been getting shellacked, not just on everyone else’s late-night show but even on his own show, in a paddling administered by Jimmy Kimmel on Thursday night.

Jacob Bernstein: Skunk at the Party

Kim Masters Exclusive: Conan's Exit Confirmed
“I’m getting beat up in the press,” he lamented in his monologue Friday. “You know it’s bad when Tiger Woods calls to offer you PR advice.”

As a result of this fracas, O’Brien’s ratings have soared—past his timeslot rival David Letterman’s, and past Leno’s in primetime. It’s only temporary, of course, but it punctuates this episode nicely.

NBC has damaged Leno in all of this, raising the possibility that once he returns to The Tonight Show, he will not be able to beat Letterman and whatever other competition happens to materialize. One studio executive says there can be no doubt: “You can’t be the butt of so many jokes and not pay a price.”

The price might be that Leno, who has always enjoyed a nice-guy reputation, also seems to be exposing a different side of himself. He came out fighting during his monologue on Friday—"Even Letterman is taking shots at me. Usually he's just taking shots at interns." But jokes like that may not serve him well in the long run.

Meanwhile, the Los Angeles Times speculates that Jimmy Fallon could emerge as the victor who will succeed Leno when (if) he finally retires. Perhaps that prospect is pleasing to Saturday Night Live producer Lorne Michaels. You might think Michaels would have been piqued to see his former protégé O’Brien knocked from his perch (Michaels proposed O’Brien for the post- Tonight Show slot in 1993). But he’s remained silent and in the shadows during this episode, perhaps because he is said to have been miffed because he was not made an executive producer when O’Brien got The Tonight Show. (Michaels does produce Fallon’s show.)

Leno isn’t the only member of the NBC Universal family to be damaged in this process. CEO Jeff Zucker has been mercilessly mocked—even in Maureen Dowd’s column. With Universal chief Ron Meyer emerging as the hero in the saga and Jeff Gaspin having proved that he is capable of running those profitable NBC Universal cable channels very handily, the question asked—and asked, and asked again—is what purpose Zucker serves. Even if they weren’t already planning to be rid of Zucker, what can the owners-in-waiting at Comcast make of him now? “If I were those guys I’d be simply appalled,” says one former studio chairman.

We always figured Zucker would finally be done once the Comcast deal closes (though that will take months). All they can do is hope that the Zucker-inflicted damage will be contained until then. As for Zucker, he’ll walk away with a much bigger check than Conan.

And he is seemingly impervious to shame. My colleague Jacob Bernstein heard from a source that Zucker is likely to appear in the audience Sunday night when NBC broadcasts the Golden Globe awards.

Regardless of whether Zucker attends, Ricky Gervais, the comedian who's hosting the show, is likely to have a laugh with this one. "Ricky loves Conan," says a person with business ties to the British funnyman. "All the comedians love Conan, they all hate Jay, and they all hate Jeff. Ricky will say anything he wants."

Yet another reason why the Globes are more fun than the Oscars.

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Kim Masters covers the entertainment business for The Daily Beast. She is also the host of The Business, public radio's weekly program about the business of show business. She is also the author of The Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.